Economy News

PMUY cooking gas connections cross 100 million

Coverage still low in northeast states

The number of beneficiaries under the Pradhan Mantri Ujjwala Yojana, a scheme that aims at providing LPG (liquified petroleum gas) connections with subsidy to poor households, has crossed 100.1 million, according to the latest data released by the Petroleum Planning and Analysis Cell.

The government expects to extend the benefit to 103.5 million households under the scheme by 2025-26.

The scheme was launched in May 2016.

However, this penetration still remains comparatively lower for the northeastern states with LPG coverage under the PMUY registering only a minimal growth of 5.5% over eight years of the scheme launch. At 33.5%, the eastern part of the country accounted for the highest percentage of PMUY connections.

Not only the LPG connections have grown under the central government’s scheme but the individual sales of the cooking fuel by the state-owned oil marketing companies have also jumped to 80.9 thousand metric tonne (TMT) from 29 thousand metric tonne between April 2007 to January 2024, the data showed. 

“As of January 2024, OMCs have 320 million active LPG domestic customers as compared to 149 million in April 2015,” the report said.

The country’s average per capita consumption of cooking gas under the scheme has improved to 3.8 cylinder refills in April to October of FY24 from 3.01 refills in FY20 and 3.71 in FY23 on an annualized basis, Union Minister for Petroleum and Natural Gas Hardeep Singh Puri had earlier said in a reply to the Parliament.

The government had launched the scheme back in 2016 with an aim to provide cooking fuel i.e. LPG to poor households while discouraging the use of traditional kitchen fuels including cow dung cakes and firewood which are more polluting.  

Last year in August, the government had announced a price cut of Rs 200 per cylinder in LPG prices for all domestic consumers and decided to expand the scheme with additional 7.5 million connections. For PMUY beneficiaries, the price cut was over and above the subsidy of Rs 200 per cylinder already in place. In October 2023, the government again hiked the subsidy for PMUY consumers by Rs 100 taking it to Rs 300 per cylinder. 

With the announcement of expansion of 7.5 million additional LPG connections in three years from now, the total subsidy outgo for LPG this fiscal as per revised estimate is Rs 12,240 crore. For next fiscal, the budget has made provision of Rs 11,925 crore under LPG subsidy.

Even as the country’s consumption of LPG grows with more consumers now switching to the cleaner fuel, the domestic production of LPG has remained low with a decline of 1% in the first ten months of FY24. During April to January of FY24, the country produced a meagre 10.6 million tonne of LPG against its consumption of 26.6 million tonne during the same period. 

The International Energy Agency has projected India’s imports of LPG rising during the present decade which is set to increase by 130,000 barrels per day to more than 600,000 barrels per day by 2030. UAE, Saudi Arabia, and Kuwait will be the largest supplier of LPG to India, according to the IEA. 

“These schemes, including the provision of stoves and subsidies, have contributed to substantially higher LPG demand (in India), which grew by a total of 51% (5.3% per year) between 2015 and 2023,” the IEA said in its latest report for the Indian oil market. The agency further sees a 2.7% growth in LPG demand of the country per year going ahead.

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